(11-01-2017, 03:00 PM)StroudCrowd1 Wrote:

(11-01-2017, 02:28 PM)MalabarJag Wrote: Roth IRAs are non-deductible. The tax is collected up front, and then there's no tax on them when it comes time to spend them. So if the money spent on traditional 401-Ks are taxed, people would choose Roth IRAs. That helps the government's bottom line now, but it loses revenue in the future.

That's assuming the government doesn't turn around and change the law sometime down the road so that Roth IRAs can be taxed. Frankly, I don't trust them.

In either case, taxing 401-K contributions would result in less money set aside for retirement. That's incentivising a bad choice.

I have always done Roth deferred 401K's at my past 2 jobs. That means that everything YOU put in is pre-taxed like a Roth IRA, but your companies match isn't. Typically when I have left a job with this type of 401K and liquidate the account, you get 2 separate checks for roth and non-roth.

In any case, the benefit of a 401K over an IRA is the employer match. Hope that doesn't go away.

That's a matter for your company, not the government.  I have in the past taken the 401k offering from employers only if they matched my contributions.  My last employer as well as my current one offer a 401k, but no matching.  I stayed away from both plans since my investment options were limited.

Instead, I have both a Roth and a Traditional IRA that I contribute to and manage myself.  My retirement nest egg has grown more significantly than it would have had I stuck with employer-sponsored 401k's.

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